Update 10/17/08: The Online Savings Account yield has fallen to 3.60% APY.
Update 10/10/08: The Online Savings Account yield has increased from 3.55% to 3.75% APY.
Update 9/27/08: The new Online Savings Account is now listed at GMAC Bank's website. Account applications can now be done online.
GMAC Bank has just started a new online savings account with a yield of 3.55% APY for balances over $500 (3.45% APY for under $500). This is 55 basis points above the Money Market Savings yield. The main downside with the new Online Savings Account is that it has no check writing and no debit cards.
This new account isn't listed at GMAC Bank's website. It's only for existing customers with a Money Market Savings Account. According to the CSR, this just started, and they plan to make it available on their website for everyone sometime in the future.
My Experience Opening the Online Savings Account
A reader mentioned receiving a letter from GMAC with an invitation to switch his existing Money Market Savings into this Online Savings Account. I haven't received this letter yet, so I called and asked about it. The CSR said that I was eligible for this new account. The reader said the letter only gave the option of switching over the old account to this new one. However, the CSR said you can also just add this new online savings account and keep your old Money Market Savings Account. She said this could be done by phone, so I went ahead and had it done.
The CSR funded this account with money from my Money Market Savings Account. It was done very quickly. After the call, I logged in, and it was already set up with the money transfered. The new account also shows up in the transfer page so I can transfer into and out of this account using all my linked accounts.
The only little glitch was that it was listing the 3.45% APY instead of the 3.55% APY for a minimum balance of $500. I called back and the CSR confirmed that it should be 3.55% APY and said they will look into this. Since it's a new account, perhaps they're still a few small glitches.
Update 9/10/08: I logged into my account, and it now shows 3.55% APY for my new Online Savings Account. A GMAC rep actually called me about this yesterday. I asked again about the minimum balance requirements of this new account, and the CSR said that both the minimum balance and the fees are the same as the Money Market Savings Account.
Details of the Online Savings Account
Here are some details about this new Online Savings Account that I was told by the CSR. Let me know if you receive different info. Since it's new, there may be mistakes. They're mailing me a welcome kit which should include these details in writing.
- 3.55% APY for balances $500 and above
- 3.45% APY for under $500
- Minimum initial deposit is $50
- Minimum balance to avoid a monthly fee is $500
- $7.50 monthly fee if balance is under $500 ($5 with direct deposit)
- $10 fee for more than 6 withdrawals per month
- Internal withdrawals count towards the 6
- The 6 withdrawal limit applies separately to the savings and MMS
I was happy that they allowed me to open a new account rather than convert my existing account. I don't use checks that often, but I do use them every now and then (can be useful for funding a CD).
The yield on GMAC's MMS account has been lagging for much of this year. It has remained at 3% APY while many others have been 3.50% and above. So I'm glad to see GMAC adding this account if it can allow them to be more competitive. This is similar to what Capital One has done with its Online Savings Account.
My Past Experience with GMAC's Money Market Savings Account
I've been very happy with my GMAC MMS account. The ACH transfers are fast. The holds are short. External links are easy to set up, and there doesn't seem to be a limit on the number of links. I have more details about this MMS account in my GMAC MMS account review. I also have the rate history of this account for the last two years. The yield has held at 3% APY since 2/29/08.
GMAC in the News
GMAC Bank's parent has been in the news lately due to its troubled mortgage lending arm, Residential Capital (ResCap). Latest news is that ResCap is is cutting 60% of its workforce to cope with the continued weakness in the housing and credit markets. According to the article, ResCap has posted 7 consecutive quarters of losses, totalling $7.2 billion. I don't know how this directly affects GMAC Bank which still has decent financial ratings. These are based on 3/31/08 data, but as you can see, ResCap has been having problems for a long time. GMAC Bank has a 4-star rating (sound) at Bankrate.com and a 4-star rating (excellent) at BauerFinancial.
Update 10/10/08: GMAC Bank's financial ratings for soundness have gone down since the initial post. Bankrate's safe & sound rating has gone down from 4 to 3 stars (performing). BauerFinancial's rating decreased from 4 stars to 3.5 stars (good). Both ratings are based on 6/30/08 data.
As I recommend with any bank, make sure to keep your deposits under the FDIC limits. For issues on FDIC coverage above $100K, please refer to this recent post, and for more details, refer to this post. GMAC Bank accounts are FDIC insured (FDIC Certificate # 57803).
Thanks to the reader who mentioned this new account in the comments.